Govt to raise Rs10,000cr via Bharat Bond ETF

New Delhi: The third tranche of Bharat Bond ETF, through which the government is looking to raise over Rs10,000 crore, will open for subscription on December 3, an official close to the development said on Monday. The subscription will be closed on December 9. Further, the base size of the issue will be Rs 1,000 crore with an open green shoe option, the official added. Bharat Bond ETF is an exchange-traded fund that invests in the debt of public sector companies. Currently, the ETF invests only in 'AAA'-rated bonds of public sector companies.

Edelweiss Asset Management is the fund manager of the scheme. The funds raised through the debt ETF helps in smoothening borrowing plans of the participating CPSEs or public sector banks. It also helps them in meeting their capital expenditure needs. The scheme information document (SID) has already been filed with the capital markets regulator Sebi. The latest tranche comes after the successful launch of the initial series of the ETF in December 2019 and second series in July 2020.

The second tranche of the Bharat Bond ETF was oversubscribed more than three times, collecting about Rs 11,000 crore. It had fetched about Rs 12,400 crore in its debut offer. The Bharat Bond ETF offered maturity options of five and 12 years in its second tranche; while in the first tranche, maturity options were for three and 10 years.